So today we had some great presentations from market research firms about the US economy, and specifically the housing market. When will it recover? Will it recover? What does the data say?
One in particular (you know who you are) reduced the tale, and their predictions into a mathematical equation - vacant developed lot supply and housing starts. The theory being that the housing market and all its resulting impacts on the economy will not bounce back until the number of closings surpasses the number of starts - thus working off the excess inventory. Perfectly logical, and there is data back as far as 1977 to prove this is true.
But what about the people? Where do their preferences and their hopes and fears factor into this formula? For some, that's the squishy part. And we had good conversation among our team about what each of us think is going on in the consumer's mind today. Because we are all consumers ourselves the tendency sometimes is to interpret the data based upon our own behavior and project that to the market at large. Oh to have that crystal ball.
I love all the data, and the analysis of it. I love trying to determine what it tells us the best action should be.
And at the end of it all, it's my simple mind that takes me back to the most basic questions:
Who is our customer?
What do they want?
How and when do they want to buy it (this one is more complex than it sounds)?
What can we do to give it to them?
Tackling these questions is risky. It means stepping outside of ourselves, and our sometimes long-held beliefs about what matters to customers and why. And getting to that answer takes listening to your customers. Sometimes not an easy task for folks who have done the same thing for a long time and done it quite successfully in many cases.
Is the buyer really different today? Any different than the last major economic hurdle? I believe so, and not just because of pure demographics. The very fact we can have conversations like this, and that millions of others are doing the same thing everywhere has changed things forever.
That changed consumer today has different needs than they did last year.
So how do we find that consumer in among the data?
Oddly enough, many 'old guard' TV networks are asking themselves similar questions... where's our audience. How do we get them back?
ReplyDeleteThere is no one answer because there is no one consumer. Teri, in your profile you may have articulated what needs to be answered in its essential form: "What matters everywhere is how people relate, connect, live and share their lives."
What do customers want? Anything that's too good to be true. Ask Bernie M. and AIG and the others who helped dig the financial hole for the world. Yes, greed seems to be universal.
What do customers need?
• Honesty and integrity from developers, builders, mortgage lenders, and service providers. We need to be able to trust somebody again.
• Buildings that are designed and built of materials that will withstand whatever the predominant weather may be... ie: no leaky condos.
• Value for dollar. Which would imply that residences at the very least are built to minimum code, although as Mike Holmes points out, doing the bare minimum is a false economy in the big picture. It costs very little more to do it right when it comes to house infrastructure. And the house should be sound and trouble free for at least the 5-year warranty.
But that's all tangible. You can do all that stuff and still not make the sale.
How can you become the provider that best fits with how people live or want to live? (The intangibles that fulfill your profile quote.) The one that provides housing designed to help people connect with each other and interact in a safe environment with others of similar needs. And how can that be an affordable reality for you and the consumer? And what does that look like? There is no one single model given the potential parameters.
If I can reference broadcasting again: The Golf Channel will NEVER be the overall leader in ratings. But for the market they are serving, they are very strong performers. Same for HGTV, and many of the specialty channels. As opposed to the CTVs and Globals. They still play the ratings games but their revenues have tanked. And Global, because it tried to buy all the competition to return to the good old days, is in significant financial trouble.
So do providers try to stay the course with a ‘one size fits all’ approach, or do they develop specialty sub-brands that cater to different levels of customer purchasing power and lifestyle desires.
Perhaps I’ve merely stated the obvious here, but I think business as usual won’t fly in this new reality. We have satellite, Tivo, PVRs and video on demand. Books now print on demand. And people waste hours of their lives on trivial contests & challenges courtesy of friends and acquaintances on Facebook.
Your turn.
We absolutely believe that the consumer has changed, is changing and will remain changed - question is really how long this lasts.
ReplyDeleteWill send you some interesting articles - consumers are cooking at home, planting gardens, doing more repair projects, making their homes more energy and cost efficient, stocking up to cut costs, etc. All these have implications for home and community design.
We are planting our Victory Garden this weekend!
PFD
Dave: AWESOME comments regarding the changing world of TV. In a way, the rise of the specialty channels that began decades ago was really the leading edge of specific content being created for niche consumer needs.
ReplyDeleteThanks for sharing your perspective on the parallels between TV habits and the changing consumers we are all trying to better connect with today.
The points Peter that cites have been paralleling the rise of specialty channels over the past 5 - 10 years. Boomers - the damn things - have started frequenting providers with higher levels of service. So while big-box stores were proliferating to service them with cheaper goods and little manpower, Boomers were starting to head in another direction. They're willing to pay for better service. To have people remember your name and treat you like a 'friend' as opposed a customer. And to interact with people that they have a 'relationship' with, who have proven that they can be trusted.
ReplyDeleteAs you get older family and a select group of friends become more important in your life. And for Boomers, the throwback goes to childhood when you saw parents and grandparents doing what they could to be self-sufficient, growing much of their own food, doing family meals, socializing with a small group of good friends, and staying close to home (all remnants of the great depression).
How long will it last? How long was the boom? Until another demographic steps up to 'control' the market I think it's WYSIWYG until enough boomers die off to make way for others.
If they're like me, they're in no hurry cash in the farm.
This is a great conversation. I'm going to add a couple of thoughts about our current economic situation, from a Canadian viewpoint, and from conversations with and observations of my friends and family. Then, I'll try and add some thoughts about the value of questions and listening.
ReplyDeleteI don't believe that we're (in BC) anywhere close to depression era thinking. While many of us have slowed down our spending a little, and are thinking more before making large purchases, we're only playing around the margins of being more conservative in our spending and living. We see this change through our own mental models and perspectives as Teri says,and I'm very worried that new mental models are being developed by media that is reporting only are part of our economic change.
We made a lot of bad decisions, and continued to spend, buy and acquire debt without understanding any kind of economic theory, or history. Government, business, financial institutions and individuals are all responsible and accountable for what happened. Where we really believing that there would be no market correction? I heard a presentation from a financial analyst in 2004, in which she forecast the potential recession. Did we all just choose not to understand that the unprecedented and unregulated growth could continue? Did our mental models prevent us from understanding what was likely to happen?
I just finished a piece of research that reminded me so clearly about the assumptions that lead us to our conclusions. We look at data, and make decisions that reinforce what we believe. We used a mix of quantitative and qualitative data. As Teri suggests the numbers and the analysis are great -- they give you sense of trends and lead you to some themes. What really helped me understand the data, was listening to individuals and their stories through focus groups and individual interviews. I'm beginning to believe that many of the answers we seek are in really listening to stories, and asking those powerful questions.
Great points Heather!
ReplyDeleteI agree that a majority of people in Vancouver/ Victoria especially, are not thinking in recession-mode for the long haul. They don't understand the reality that small town BC knows. Across the province you have mill towns with no operating mills. Forestry is in the tank for reasons that include vastly diminished 'housing starts' in the US. Mining and exploration surged in 2007 thanks to Chinas expanding needs, and then flattened in 2008. Manufacturing in North America is in trouble or moving to Mexico. Or Asia. Workers in northern BC are moving further north or east to Alberta in search of work. And a building lot in Dunbar is $600K. Who can afford that? Really?
Information in the media is superficial at best, and unreliable at worst. It means becoming a CSI. Let the facts/science tell the story. Don't - as Heather points out - pick the facts that fit your desired outcome. (not that you'd do that Teri) Due diligence. Listen to enough people to get an accurate idea of what they want and need and can afford.
Do the reality check: then become the solution. May mean a corporate reinvention.
And listen with open ears. I have been involved in too many conversations of late where someone says, "that data is wrong" if in fact the direction in the data being presented somehow conflicts with a long-held opinion or perception.
ReplyDeleteVery hard to do - listen to the data - and understand what's behind it - rather than picking out facts to reinforce a position you've known for a long time.
Let the voice of the customer be the guide. Listen to what they say, then think about what it means to them.
I love the idea of a corporate reinvention! It's always seemed odd to me that a few people with most often the same shared perceptions of reality sit around board room tables and invent solutions for people they too often have very little contact with. was that my outside voice???